AUD Technical Analysis

The Australian Dollar continues to struggle for near-term direction near the 0.74 figure against its US counterpart but the dominant trend remains firmly bearish. The series of lower highs and lows established in late January from double top resistance above 0.81 continues to define price action.

From here, a daily close below chart inflection point support at 0.7335 opens the door for a challenge of double bottom support in the 0.7145-65 area.

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The Australian Dollar has lacked interest rate support compared to its big US brother for all of 2018, and that trend looks set to continue judging by another docile inflation print on Monday.

The Melbourne Institute’s monthly gauge showed a 0.3% rise on the month in September, for a 2.1% annualized gain. Admittedly that monthly rise was stronger than Augusts 0.1% uptick, but the yearly figure was unchanged. Moreover the ‘trimmed mean’ measure showed inflation up just 1.8% on the year. The Reserve Bank of Australia will give its October interest rate decision on Tuesday. It is expected to keep the Official Cash Rate at its now-venerable 1.50% record low once again.

The Australian economy is not doing at all badly on many counts, notably overall growth and job creation. However, inflation remains stickily low, only having crept back into the RBA’s target band in this year’s second quarter -for the first time in over a year. Official inflation is running at 2.1%, the same rate as the Melbourne Institute’s current measure.

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The Australian Dollar has tepidly recovered to challenge trend resistance guiding it lower against its US counterpart since late January. That barrier is now in the 0.7136-0.7210 area. A daily close above that would neutralize the near-term bearish bias and initially expose the September's swing highs in the 0.7304-15 zone.

Alternatively, a turn back below the October 8 low at 0.7041 sees the next significant barrier at 0.6900, the September 2015 bottom. That is closely followed by the January 2016 trough at 0.6827.

Shorter-term positioning favors the latter scenario. The four-hour chart reveals the appearance of negative RSI divergence on a test of inflection point resistance, hinting at ebbing upside momentum that might precede reversal. Confirmation on a break of counter-trend support is still pending however.

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The AUDUSD price is now close to support from the lower bound of a rising channel that has been in place since late October. It is also sitting on the 20-day moving average and is not far above the 50-day and 100-day moving averages, suggesting that any further near-term downside is limited.

This all suggests that a move closer to the top of the channel is a possibility in the next few days even though the 14-day relative strength index has so far failed to confirm the higher highs for the price over the past six weeks.

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AUD/USD Technical Outlook: Slightly Bearish

The Australian Dollar continued its pursuit lower against its US counterpart this past week, failing to hold on to upside momentum towards the end of it as expected. This followed a break under a near-term rising support line. From this point until the end of the year, the outlook still remains bearish, but only slightly so. This is because AUD/USD struggled closing under the December/May 2016 lows on the chart below.

Bearish technical arguments in AUD/USD can be further solidified if we get below 0.71452. Then, all that will be standing in the path of the Australian Dollar and 2+ year lows is support at 0.70211. In the event of a push higher, near-term resistance is at 0.72466. Climbing beyond that exposes the descending trend line from July. There was previously a false breakout above it earlier this month. Confirmation of an upside reversal would require closing above the highs it left, around 0.73935.

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AUD/USD Technical Outlook: Bullish

The Australian Dollar made an aggressive push this week against its US counterpart, flying past multiple resistance barriers highlighted in last week';s technical forecast. Notably, AUD/USD closed above 0.72466 which was the outer boundary of horizontal resistance. This has opened the door to testing the highs achieved back in December 2018 between 0.73572 and 0.73935.

Guiding the Aussie Dollar ahead might be a rising support line from early January (upward sloping red line on the chart below). A descent through it would expose a horizontal range of support between 0.71645 and 0.71452 before the January 24th low at 0.7081. With that in mind, these technical signals hint that AUD/USD might be readying to extend its near-term uptrend. The outlook looks bullish.

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AUD/USD Technical Outlook: Slightly Bearish

The near-term uptrend in the Australian Dollar quite literally fell apart this past week. AUD/USD descended through a rising trend line as it cleared a horizontal range of support between 0.71645 – 0.71452. However, the pair appeared to struggle achieving a daily close under the January 24 low at 0.7081. This further reinforced this area as support.

A descent through it would probably be the confirmation needed to argue technically that the pair may extend its declines. This places near-term support as a range between 0.70211 and 0.69819 next. Meanwhile, a climb back above resistance would expose the late January/early February highs (0.72729 – 0.73). With that in mind, the AUD/USD technically outlook appears slightly bearish.

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AUDUSD failed to make a convincing break above the descending trendline yet again. The pair currently holding the 0.7100 handle after a somewhat excessive move to the downside. Key support situated at the 0.7067, which marks the 23.6% Fibo level. Momentum indicators remain bearish; however, this has eased in recent sessions, which in turn could see slight stabilisation in the near-term. On the topside, resistance is at 0.7180-0.7200.



AUDJPY remains bearish below 80.00, overnight saw topside resistance at 79.80 hold firm. Momentum indicators continue to point to a bearish outlook. Eyes now on support situated at 78.40-50, whereby a firm break below could open up a move towards 78.00.



Key support at the 1.04 handle continues curb AUDNZD from further losses, alongside this, bearish momentum indicators have notably eased over the past week suggesting that the cross may have based out around 1.0370. As such, there is increased scope for a move to the upside with the 50dma at 1.05 in focus.

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The Australian Dollar continues to struggle for directional conviction against its US counterpart, with prices still stuck in choppy range near the 0.71 level. Still, overall positioning suggests the path of least resistance favors a downside bias. An orderly decline started in January 2018 bottomed in October, giving way to prolonged consolation. Price action since then has traced out what appears to be a descending Triangle pattern. This is a setup typically indicative of bearish trend continuation.



Confirmation is still pending. A daily close below support in the 0.6982-7021 area would complete the Triangle, initially exposing the 0.69 figure thereafter. The pattern would imply far more ambitious downside objective below the 0.66 figure over the longer term however.

Invalidation of the bearish setup calls for a daily close above resistance in the 0.7093-0.7188 zone. A daily close above its outer layer may not necessarily imply a structural change of trend, but would probably defuse near-term selling pressure and set the stage for a retest of the January 31 swing high at 0.7295.

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The Australian Dollar is retesting support-turned-resistance marking the underside of a broken Descending Triangle chart formation in the 0.6978-0.7021 area. Prices bounced after finding support above the 0.68 figure, marking a bottom with the formation a bullish Morning Star candlestick pattern and a break of trend line resistance set from the mid-April swing high.

A push beyond this barrier would cast doubt on the Triangle breakout’s validity as a bearish continuation signal. Neutralizing the near-term downside bias in earnest will probably require a step further to clear downward-sloping resistance capping gains since December 2018, now just above the 0.71 figure. However, zooming into the 4-hour chart hints that upside momentum may already be fading.

AUDUSD put in a dramatic-looking Shooting Star candlestick on a test of resistance at the 0.7008. This coupled with overt negative RSI divergence suggests the move higher has run out of steam. Confirming that the broader downtrend has commenced calls for a break of upward-sloping support guiding gains from late-May lows, now at 0.6951.

If a bearish reversal does materialize – cementing recent gains as corrective in the context of an ongoing decline – then there seems to be scope for significant follow-on weakness. Initial support lines up in the 0.6827-64 area, running from the January 2016 low to last month’s swing bottom. Triangle setup calls for deeper losses however, implying a measured move to the 0.67 figure.

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